Financial incentives to stimulate integration of care · Examples: global payment, accountable care organizations with shared savings, PFP, bundled payment, and PFC. They introduced:

Financial incentives to stimulate

integration of care

Dr. Apostolos Tsiachristas

IFIC Webinar, 24/02/2016

Content

Background

Why financial incentives to integrated care

What are the existing models

Barriers and facilitators

Impact

Future of financial incentives in Europe

Types of incentives

Existing (dis)incentives may be identified at several levels

targeting at different stakeholders

Incentives for healthcare professionals:

• Financial incentives

• Professional ethics (intrinsic motivations)

• Organizational cultures

• Policies and governance

The goal of financial incentives

The underlying goal of incentives is not simply rewarding

good performance or punishing bad performance.

The goal of using incentives is to support the change in

the status quo by:

• stimulating both immediate and long-term improvements

in performance

• creating alignment between expectations and rewards

• removing financial barriers that perversely effect desired

performance

(Custers et al., 2007: 382)

Financial incentives vs intrinsic

motivation?

Debate whether incentives well targeted or whether

they might even undermine intrinsic motivations of staff

(Elovainio, 2010).

Especially in health and social care, financial incentives

may even result in ‘crowding out’ intrinsic motivators

such as purpose or altruism (Woolhandler & Arieli,

2012; Harrison & Marshall, 2005).

Glasziou checklist whether financial incentives via P4P

would be beneficial rather than harmful (Glasziou et al.

2012, BMJ)

Financial self-interest: is it wrong?

Physicians in Ancient Greece:

- Had an interest in money to make a living

- Were not ashamed of admitting it

- The medical ethics ordained that a physician should not

be preoccupied by money, but NOT that he should be

indifferent to money

If the self-interest of suppliers matched by the

self-interest of consumers leads to an optimal

outcome for society as ‘man is led, as if by an

invisible hand, to promote ends which were not

part of his original intention’ (Smith,1776)

Due to market failures in health care,

governments took up the role of matching-self

interests and became the ‘visible hand’

Content

Background on financial incentives


What are the existing models of providing financial

incentives in Europe

• Barriers and facilitators

• Impact


Burden of chronic conditions

Chronic conditions are related to:

• 60% of all DALYs

• 75% of total health care expenditure

• Other costs: disability, premature mortality, work absence,

reduced productivity, early retirement, informal care

This threat increases due to:

• increasing prevalence

• multi-morbidity

Integrated care

To incentivize cooperation,

communication and joint visions a

number of preconditions have to

be:

Adequate leadership and

governance at various levels in

the system

Adequate ICT support

Adequate (financial) incentives

for providers, patients, payers

Tools to assess and monitor

performance as well as

unintended effects

Mark FitzGerald, Chest 2014

Traditional payments unable to

facilitate integration

Salary: fails to stimulate integration of care because there are potential incentives to accept only healthy patients (cream skimming) and to refer complex cases to more costly secondary services (dumping)

Capitation: chronically ill are financially unattractive as they require more time and services to treat, at the expense of the physician

FFS: little incentive to provide high quality of care and adequately address the needs of patients with chronic diseases.

Integrated care requires integrated

payment

Care integration

Pa

ym

en

t in

teg

rati

on

Single isolated organisations

Multidisciplinary network of collaborating caregivers

from different organizations

Full organisational integration of care

delivery

DRG

Per visit/ procedure

Bundled paymentPer patient per episode/

condition

Per insured per period

Lump sum per period

(Population-based) global

payment

Fee for service

Capitation

Per patient per period

Network type HMOStaff type HMO

Global budget/salary

GP fund holders

Accountable care organisations

Based on Shih al. The Commonwealth Fund 2008 & Eijkenaar et al Eur J Health Econ 2013; 14: 117-31

Financial risk

Source: UHCHRM, 2012 and KPMG, 2014.

Who bears the financial risk?

Averill et al., 2009

Incentivize different stakeholders

Purchasers/payers: • What: the allocation of resources towards coordination and more integrated

care delivery

• Examples: ‘Accountable Care Organizations’ with population based payment or earmarked payments

Providers: • What: provision of coordinated/integrated care

• Examples: global payments, pooled funds, bundled payments, pay-for-coordination, pay-for-performance

Patients: • What: patient compliance, prevention and self-management

• Examples: personal health budgets or waivers/reductions of out-of-pocket contributions

• Supplemented by preventive and health promoting measures such as discount for gym membership and privileged access to physicians outside normal hours

Incentives for different stakeholders should be aligned!

Alternative payments in the U.S.

Aim: to contain costs and improve quality of care.

Examples: global payment, accountable care

organizations with shared savings, PFP, bundled payment,

and PFC.

They introduced:

• financial risk to providers,

• explicit measures of quality improvement driven by financial

incentives to providers,

• efforts towards patient-centred care through integration and

coordination of care

• financial incentives for patient safety.

The European version of payments

Adapted to be “transferable” to the European context

Accompanied by broader reforms in the European health care systems

The adoption (i.e. which) and adaptation (i.e. how) were based on the structure of its health care system

Combined (e.g. global payment with PFC in Germany) or provided on top of traditional payment schemes (e.g. PFP on top of capitation and FFS in England).

Targeted those stakeholders who were expected to adjust their behaviour and provided them with adequate financial incentives.

Content






• Impact


Financial incentives in Europe Reform Target group

Elements of integrated care

Financial incentives Uptake

Austria Health Reform Act 2005

Social health insurers and regional governments

DMPs across primary and secondary care

Budget pool of 1-2% for ICPs

Low

GPs DMPs €53 initial + €25 quarterly to coordinate care

Denmark Administrative Reform 2007

Region Multi-disciplinary teams, continuity and coordination of care

€70 million for ICPs

High Municipalities

15% of a regional healthcare budget to reduce inpatient care

Co-financing of inpatient care

France

Health Insurance Act 2004

GPs DMPs in primary care for 30 chronic diseases

€40 per patient for coordination Medium

CAPI 2009 GPs Integrated care related performance indicators

up to €6,000 annual reward for high performance

High

Germany Risk Structure compensation Act 2002

Social health insurers DMPs across primary and secondary care

Benefit to €1,000 per patient per year

€153 annually per patient for coordination

Medium/High (but mainly in primary care)

GPs Care coordination and documentation

€75 annually per patient NA

Netherlands Bundled payment Mainly primary care providers

DMPs for diabetes, COPD and CVRM in primary care

Price negotiated between insurer and care group (bundled); Performance is a factor in price negotiations

Medium/High

United Kingdom

Quality and Outcomes Framework 2004

GPs Integrated care related performance indicators

reward up to 30% of salary High

Portugal Performance compensations 2006

Multi-disciplinary primary care teams

Multidisciplinary high quality care, continuity of care

NA NA

Hungary

Act of Social Health Insurance Fund’s Budget 1998

Care providers Coordinate primary, secondary tertiary care

amount per patient per year NA

Performance based payment 2009


€10.9 million budget for GP bonuses NA

Estonia Performance based payment 2009


up to €255 per month on top of capitation

NA

Payment schemes for ICC

Pay-for-coordination (PFC): payment for coordination of

care provided by different care providers (AUS, DEN,

FRA, GER)

Pay-for-performance (PFP): payment or financial

incentive associated to improvements in the process and

outcomes of chronic care (ENG, FRA)

All-inclusive payments including:

• Bundled payment for a group of services for a specific disease

involving multiple providers (NL)

• Global payment, risk-adjusted payment for the full range of

services related to specified group of people (GER)

Evidence in the literature

PFC can be cost-saving (Berry et al., 2013)

PFP can potentially be effective (de Bruin et al., 2011;

Eijkenaar et al., 2013) and cost-effective (Walker et al.,

2010)

Bundled payment may reduce health care utilization

(Hussey et a;., 2009)

Global payment may improve quality and reduce health

care expenditure (Song et al., 2014).

Facilitators and barriers

Facilitators Barriers

Pay-for-

coordination Stakeholder cooperation (AUS,

GER)

Patient demand (AUS)

Adequate financial incentive for

GP engagement in DMPs (DEN)

Gaming (GER)

Misaligned incentives between

stakeholders (AUS)

GP Opposition (AUS,GER, FRA)

Virtual budget (AUS)

Inflexible task allocation (AUS)

Pay-for-

performance

Adequate financial incentive for

GPs (ENG, FR)

Gaming (ENG)

Defining performance indicators

(ENG)

Bundled Payment Stakeholder cooperation (NL)

Flexible task allocation (NL)

Gaming (NL)

Lack of transparency (NL)

Lack of comprehensive means to

address multi-morbidity (NL)

Global Payment Adequate financial incentive for

engagement (GER)

Stakeholder cooperation (GER)

Misaligned incentives in short

versus long-term(GER)

Gaming (GER)

Political investment (GER)

Tsiachristas et al., 2013

Impact on expenditure

Immediate impact on outpatient (PFC, ALL), hospital care, administrative (PFP)

Volatile implementation of financial agreements

Sustainable impact had only PFP and ALL

Concerns:

• PFC - suitable as start-up

• PFP - may jeopardize quality of non-rewarded services

• ALL - supply induced demand

Blended payment scheme:

• Basis: a yearly risk-adjusted population-based global payment

• Additional: pay-for-coordination and pay-for-performance

• Shared savings to avoid “gaming”, align incentives, support prevention, and reward patients

Tsiachristas et al., 2016

Content






• Impact


Ongoing payment reforms

Germany

• 2004: Health Care Modernization Act providing PFC and a global payment

• 2015: Health Care Strengthening Act created a large pooled budget across sectors

England

• 2004: Pay-for-performance in GP care

• 2015/2016: Year of care capitated model for a range of services for a defined time period

• 2015/2016: Better Care Fund is a single pooled budget to integrate health and social care

The Netherlands

• 2010: Bundled payment for chronic conditions

• 2013: Regional experiments with population-based payment including shared savings

• 2015: 3-tiers payment system for primary care including pay-for-coordination/collaboration and pay-for-performance/innovation

Designing financial incentives

Comprehensive, evidence-based incentives attuned to norms of

medical professionalism

Reward risk with premium

Balance of rewards and penalties depending on context

Offering providers a choice among schemes

A blend of group and individual-level incentives

Combination of absolute and relative targets differentiated across

groups

Right-sized incentives with payoff rules known in advance

Timely payment schedule, minimized time-lag

Incentives to be sustained over the long run

Conditions for success

A clearly defined population

Sufficient and relevant data to compensate for high risk patients

Unambiguous and measurable goals to determine success

Broadly accepted, sensitive, and clinically relevant indicators

Transparency and willingness to record results

Involved parties share commitment and goals

Insight into costs of the population

High degree of organization in primary care

An integrated ICT system

Long-term scope: sufficient time allowed to wait for the first

results

Future evaluation

More rigorous study designs need to:

• Account for the selection of physicians into incentive schemes

• Disentangle the effect from other reforms

• Infer causality (natural experiments or quasi-experimental designs?)

• Examine the potential unintended consequences of incentive

Studies should more consistently describe:

• the type of payment scheme at baseline or in the control group

• how payments were used and distributed

• the size of the new payments

Further research:

• Find optimal mixture (type and size) of financial incentives

• compare financial incentives with other behaviour change interventions

Future policy-making

Financial incentives are potentially powerful tools to stimulate integration of care

They should be used as a means to extend the cost-reducing potential of integrated chronic care rather than as cost-containment policies

Consider experiences from countries that have comparable health care systems and context

Strong willingness and commitment of the health authorities to re(design) financial incentives

Re-positioning financial incentives and changing behaviour in the health care sector, which requires a large share of a country’s GDP and workforce, is not an easy task

Thank you for joining the webinar!

[email protected]

Documents

Financial incentives to stimulate integration of care · Examples: global payment, accountable care organizations with shared savings, PFP, bundled payment, and PFC. They introduced: